D’Ieteren Soars as Bonus Reversal Boosts Belron: Brussels Mover

Aug. 29 (Bloomberg) -- D’Ieteren SA, the owner of the
world’s largest vehicle-glass repair company, rose the most in
14 months in Brussels as first-half profit beat analysts’
estimates because of a reversal of bonus accruals amid a sales
recovery and job cuts following a mild winter.

D’Ieteren climbed as much as 9.7 percent on Euronext
Brussels, the biggest intraday gain since June 2011, and traded
3.05 euros higher at 35.90 euros by 11:30 a.m. local time. The
shares, which have lost 2.8 percent in the past year, are
trading for 9.3 times estimated earnings next year, according to
data compiled by Bloomberg.

Pretax profit excluding one-time gains and expenses fell 25
percent to 126 million euros ($158 million) in the first half,
the company said yesterday in a statement. Analysts projected a
38 percent decline to 103.3 million euros, according to the
average estimate of three analysts surveyed by Bloomberg.
D’Ieteren, based in Brussels, maintained its Feb. 28 forecast
for a drop of about 25 percent this year.

“Although this might at first glance look conservative, we
believe it’s realistic as Belron earnings will no longer profit
from the reversal of provisions,” Emmanuel Carlier, an analyst
at ING Groep NV in Brussels, wrote in a note today. “Valuation
is attractive at 9 times 2013 price earnings.”

Belron, the 92.7 percent-owned vehicle-glass business
operating in 34 countries under brands such as Carglass,
Autoglass and Safelite, eliminated about 400 positions in the
U.K. and the Netherlands after a mild winter reduced repair and
replacement jobs by 11 percent in the first quarter. The job
cuts give Belron a lower cost base as sales started to recover
gradually in Europe in the second quarter, with a decline in
sales excluding acquisitions softening to 15 percent from 18
percent in the first three months.

Long-Term Incentive

Lower earnings at Belron also allowed D’Ieteren to release
some provisions for Belron management’s long-term incentive
plan. Provisions fell by 10.9 million euros in the first half
after a 7.5 million-euro increase in the same period a year
earlier, boosting earnings by about 18 million euros.

Margins at the Belgian dealership profited from a 113
basis-point increase in Audi’s market share to 6.53 percent,
according to figures from trade group Febiac. D’Ieteren’s
overall share of Belgian new-car registrations widened to 22
percent in the first half from 21.9 percent a year earlier, in a
market that contracted almost 13 percent.